Day Rate to Annual Salary Converter

Why a day rate isn't just salary ÷ 220

A headline day rate looks big next to a salary, but a contractor only earns on days they actually bill. Between contracts, holidays, and sick days, billable days are usually 200–230 a year, not 260. A permanent salary also bundles paid leave, employer pension and tax contributions, and benefits that a day rate must replace.

This converter lets you go both ways: enter a day rate to see the rough salary equivalent, or enter a target salary to see the day rate you'd need to match it.

Reading the result fairly

To compare like-for-like, lower your billable-days estimate to reflect real gaps, and add a benefits margin to the salary side for pension, insurance, and paid leave a permanent role includes. The closer your assumptions are to reality, the more honest the comparison.

A day rate is not a salary, even when the totals match

The number this produces is a comparison, not an equivalence. A £500 day rate across 220 billed days is £110,000, and it is genuinely tempting to read that against a £110,000 salary and conclude they are the same deal. They are not, because the salary comes with employer pension contributions, paid holiday, sick pay, notice periods, and someone else absorbing the months when there is no work.

Use this to answer the question that actually matters when you are handed an offer: what day rate would I need to be no worse off than the salary I have? Work backwards — add the employer pension, the paid leave, and a realistic allowance for unbilled weeks, then divide by the days you would genuinely bill. The honest break-even day rate is usually 30–50% above the naive salary-divided-by-days figure.